The great Australian dream of homeownership is still alive and well,
even among the emerging generations.
However, analysis
of the largest 7 capital cities in Australia shows a clear trend of both house
and unit prices growing faster than incomes over the last four decades.
House prices grow faster than wages
From 1981 to 2021,
the average full-time total earnings for Australian adults increased 5.9 times,
from $15,800 (1981) to $93,500 (November 2021).
Over the same
period of time, the lowest property price increase was units in Brisbane, which
increased in price by 9.0 times over this period (from just over $48,000 in
1981 to $437,000 by November 2021).
Melbourne house
prices experienced the biggest increase over this period, a 22-fold increase,
from $44,000 in 1981 to more than $973,000 currently.
When median
property prices are converted to average annual incomes, the most affordable
units are in Adelaide (4 times annual earnings) and the best-priced houses are
in Perth (5.9 times average annual earnings).
The least affordable properties are in
Sydney
The least
affordable properties of both types are in Sydney with units now 9 times annual
earnings and houses 14.3 times earnings.
In real purchasing
power terms, Sydney units are now twice as expensive in relative terms now
(9.0x earnings) compared to 1981 (4.3x earnings).
Over the same
period of time, Sydney houses have become almost three times as expensive in
relative terms (from 5x annual earnings in 1981 to 14.3x today).
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Jason Gwerder
Wednesday, 17 November 2021
